In 2006, a Chinese businessman named Zhang Cheng bought a Mig-21F fighter jet on eBay for US$24,730. While the purchase was widely discussed in the international press, both as a symbol of China’s newfound wealth and the quirkiness of its newly wealthy, Zhang’s impulse buy also highlighted one of the country’s longest-standing command-economy holdovers; due to restrictions on airspace and airports, Zhang had no place to fly (or land) his new toy, and had to park it "in his office."
Demand for business jet travel in China is growing, and not only for frivolous reasons.
"A lot of times the press want to paint business jets as toys for the boys," said Jeffrey Lowe of BAA Jet Management, which provides jet charter and management to clients in mainland China. "You know, ‘They’re going to go down to Phuket for scuba diving!’ But the bulk of the use of these airplanes for the owners is business. It makes them better businessmen."
Business jets save executives time, increase productivity (most business jets have telephone and internet connectivity, albeit slow), and provide privacy.
"The last thing you want during M&A negotiations is putting a lot of executives on a commercial jet," said aviation consultant Richard Aboulafia. "While you don’t need a business jet to get to Beijing or Shanghai, if you are flying into Chengdu or Xi’an, you could really use one."
In 1995, state-owned Hainan Airlines created DeerJet, which began operating a business jet chartering service. In 2003, Air China launched a business jet service operating a single Gulfstream jet out of Beijing. Beijing and Hong Kong have business aviation centers (BACs) that facilitate transfers from curbside to planeside, and one is planned in Shanghai, which will open a business jet hub at Hongqiao Airport in 2010.
The sector has seen entry from private jet charter and management services like BAA and Jet Aviation (a division of General Dynamics), both of whom also offer some fixed-base operations (FBO) services to planes and passengers on the ground. In fact, Aboulafia believes the FBO sector is the ripest for growth. "People need business jets to access factories in China," he said, "so the market for FBOs will grow faster than the markets for jets."
The government has also been more helpful, in particular by reducing the time necessary to file flight plans.
"Five or six years ago, the time it took to get approval was two or three days," said Lowe. "Now you can get central approval in 24 hours. For domestic operators, you can get approval in hours."
To take advantage of this policy preference, BAA Aviation has registered most of its aircraft on the mainland, allowing them to file and modify flight plans with local branches of the Civil Aviation Administration of China (CAAC) instead of going through Beijing.
Still a small player
There is work to be done before China lives up to its potential, though. Bill Garvey, editor-in-chief of the magazine Business & Commercial Aviation, says that a business aviation sector "hardly exists" here. While China is the world’s second-largest overall aviation market, Garvey estimates that China only has around 50 business jets, compared to over 10,000 in the US.
"All the manufacturers are eager to see conditions change," he said, "but so far only a handful of aircraft have been put into service there." Garvey sees the National Business Aviation Association’s recent decision to cancel an exhitition in China as indicative of the current climate.
Policy obstacles also remain. While Beijing has said it wants to bring its airspace allocations in line with international standards by 2010, currently business jets must fly along the same flight paths as commercial airliners. Lowe believes that this discourages business jet travel; it means slower travel times and less fuel efficiency, particularly since most business jets are designed to fly higher than commercial jetliners.
Perhaps most problematic are the remaining infrastructure challenges. Brian Foley, president of an aviation consultancy, notes that most of China still lacks the facilities necessary to allow business jets to flourish, and he doubts that the current economic downturn will help.
"Stimulus dollars are going to go to the banking sector and stimulate exports," he said. "If anything, the economic crisis is going to delay these upgrades. They have bigger fish to fry."
Popular business jets in China
Price: US$17.2 million
Capacity: Eight passengers typical, 13 maximum.
Features: Hawker 800xp is a mid-size twin-engine corporate aircraft. The extravagant interior cabin makes it a frequently requested aircraft for corporate and leisure charter. The 800xp is in service both as a business and a VIP jet and also in special mission versions.
Owners: DeerJet (Hainan Airlines)
Price: Not available
Capacity: 12 passengers includes five wide executive seats
Features: Devotes 25 feet to passenger seating. Computers, fax, telephone, SATCOM, digital data link, copiers, video displays and conference tables ensure productive flights. Supple leathers, glistening veneers and soft, deep pile carpeting are standard. Fully equipped for multiple meals, the galley houses all the essentials for fine dining, 45,000 feet in the air.
Owners: Zhongxin Air
Price: US$27.4 million
Capacity: 13 passengers + 1 cockpit jumpseat rider
Features: Three separate cabin zones and enhanced interior. The spacious cabin has six-foot clearance.
Owners: China Sonangol Int’l Limited
Price: US$7.6 million
Capacity: Nine passengers
Features: A versatile twin-engine jet aircraft modified for acquiring remote sensing imagery. The aircraft can accommodate additional passengers depending on the amount of scientific equipment.
Owners: Broad, Zhongfei General Aviation Company